Be Sure To Check Out Pzena Investment Management, Inc (NYSE:PZN) Before It Goes Ex-Dividend

By
Simply Wall St
Published
July 24, 2021
NYSE:PZN
Source: Shutterstock

Pzena Investment Management, Inc (NYSE:PZN) stock is about to trade ex-dividend in 4 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Accordingly, Pzena Investment Management investors that purchase the stock on or after the 29th of July will not receive the dividend, which will be paid on the 20th of August.

The company's upcoming dividend is US$0.03 a share, following on from the last 12 months, when the company distributed a total of US$0.34 per share to shareholders. Looking at the last 12 months of distributions, Pzena Investment Management has a trailing yield of approximately 3.0% on its current stock price of $11.3. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Pzena Investment Management can afford its dividend, and if the dividend could grow.

View our latest analysis for Pzena Investment Management

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Fortunately Pzena Investment Management's payout ratio is modest, at just 38% of profit.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Pzena Investment Management paid out over the last 12 months.

historic-dividend
NYSE:PZN Historic Dividend July 24th 2021

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Pzena Investment Management's earnings per share have risen 11% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Pzena Investment Management has increased its dividend at approximately 11% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

Has Pzena Investment Management got what it takes to maintain its dividend payments? Companies like Pzena Investment Management that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Pzena Investment Management appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

While it's tempting to invest in Pzena Investment Management for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 2 warning signs for Pzena Investment Management (of which 1 is a bit concerning!) you should know about.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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